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Sunday, 15 June 2008

Egypt fatwa orders oil money for the poor

CAIRO (AFP) — An Islamic ruling that Egypt should give some of its oil and gas wealth to the people has ratcheted up the pressure on the government, already faced with rising popular discontent over food prices.

The Islamic Research Centre of Cairo's Al-Azhar University, Sunni Islam's highest authority, has issued a fatwa or religious edict saying it is a sacred duty to pay 20 percent of oil, gas and mineral revenues in the form of alms to the poor known as zakat.

"The fatwa is based on a hadith (saying) of Prophet (Mohammed) which says that a zakat of 20 percent is obligatory on... all metals and minerals, solid or liquid," research centre member and Al-Azhar teacher Mohammed Rafat Osman told AFP.

The giving of alms is one of the five pillars of Islam and therefore obligatory for all Muslims.

Egypt's oil and gas exports were worth 10.1 billion dollars in 2007, according to official figures, and with crude oil striking a record high of nearly 140 dollars a barrel last week, 2008 revenue is set to be higher still.

Based on 2007 figures, the government's annual alms payments would in theory amount to around two billion dollars.

Egypt, whose constitution says that Islamic sharia law is the main source of legislation, has not yet institutionalised zakat, unlike some Gulf countries, such as oil giants Saudi Arabia and Kuwait.

A finance ministry official who asked not to be named said simply that the fatwa was "a religious matter" and declined to comment further.

With Egypt rocked by protests over rampant inflation, another Al-Azhar teacher, Mohammed Shawki, pointed out that zakat is an "effective mechanism to defuse social disturbance and feelings of hatred in poor communities."

The fatwa will make Prime Minister Ahmed Nazif "angrily order his Minister of Oil Sameh Fahmi to stop his regular optimistic statements about the future prospects of oil, natural gas and gold exploration in Egypt," the Egyptian Gazette reported.

"Private oil and gas companies operating in the country must also be biting their nails in apprehension," the state-owned English-language daily wrote.

Anyone failing to abide by the fatwa "will be disgraced for abusing Islam and its teachings," it said.

Despite having an official growth rate of seven percent, Egypt suffers from rampant unemployment and 40 percent of the population lives on or around the poverty line of two dollars a day.

Rising inflation means that the cost of living for the average household has risen by 50 percent in 2008, according to the UN's World Food Programme.

Sporadic protests have taken place in recent months against the high cost of living and reductions in subsidies on such staples as bread.

The Islamic Research Centre's Osman nevertheless admitted it may be difficult to get the fatwa implemented.

"We have no executive power, we cannot oblige the State to adopt our decree," he said.